Truly, all of us. As consultants we’re usually outsiders looking in, but not this time. This was happening to Sam and the UK offices, to Steve and the Australia offices, to our colleagues and clients globally, to all of us together. And together we needed to figure out how to keep going in a world suddenly gone virtual, where meeting basic human needs—like eating and staying healthy—meant doubling down on digital.
Now, a year into an odyssey some thought would last a few months, we’re taking a moment to look back at how our clients responded, how they’ve managed to recover, and what they’ve done to digitally transform so that they can thrive despite disruption. (Spoiler alert: turns out digital transformation is only partially about technology. It’s actually about people being ready to change).
ig things have small beginnings. Just so, back in January of last year, the first reports of a novel coronavirus barely raised eyebrows. Yet within weeks most travel had stopped, many businesses had closed, and all of us faced massive disruption.
Faster, More More
The pandemic has been a profound stress test for business readiness and resilience—including ours. In fact, many of the assumptions businesses are built on have been broken entirely. Plans made in the winter were in the dustbin by spring. Ideas that we thought we’d have years to consider and roll out carefully had to be unveiled in three months. It’s as if all our cards were thrown in the air and we had little clue where they’d land. It all brought to mind a darkish joke: If you want to make the Universe laugh, tell it your plans.
Still, we’re business planners. We knew we didn’t have the luxury of time and had to adapt quickly, reacting to new data and a changing marketplace. In the process, we came to realize that some things will never be the same, and that the decisions we and our clients made in the coming months would shape our next normal. There was an opportunity embedded in this catastrophe: an opportunity for enterprises to reimagine the future and accelerate their digital transformations.
We say accelerate because we’ve been helping clients digitally transform since the before times, focusing on three domains: customers, core and work. Becoming truly digital in the customer domain means reinventing value propositions and experiences. This drives growth. Having a truly digital core means digitalizing processes, automating work and mining data to optimize operations. This increases operating margin. And becoming digital in the work domain means nothing less than transforming how work is done. This provides business agility.
The pandemic didn’t change any of these fundamentals. What it did do is introduce unprecedented uncertainty, affecting each of us in significant personal ways. People are scared. Many are grieving, or uncertain about their future and finances. And while that can be an incredibly uncomfortable place to be—particularly with both lives and livelihoods on the line—there is an upside: new growth.
This may seem counterintuitive at a time when most businesses are focused on simply keeping the machine running. But consider: new growth is a business imperative. This may be hard to imagine right now, but now is actually the right time to do so.
So how’s this work? We help clients frame the opportunity using an approach we call Precision Growth, a data-driven and targeted way to identify growth opportunities quickly, and respond to what customers really value.
The pandemic has shown us that digital is now about unlocking our human potential. Digital accelerates our connectivity. It gives us access to information, products and services that meet our individual needs and create purpose. It’s what makes work better for us and makes us better at work. Perhaps most importantly: it’s the interface between humans and machines, with the power to direct technology in ways that can improve society. We know this because we’ve experienced it ourselves in our personal and professional lives. We know this because our clients have been telling us the same thing.
We’ve spoken to them, across industries and time zones, and asked them to share their personal stories of disruption and uncertainty, to describe how they’ve navigated these unprecedented times. The responses were both immediate and heartfelt. Paul Reh shared how Enterprise doubled down in its core value: empathy. David Thomasson told us how Metro Bank stepped in to rapidly provide loans to small businesses on the brink. And Burton Reist and Zack Schwartz at the US Census Bureau disclosed how they navigated a year of near-complete chaos.
This series is about these people, the people that work with them, and the people they serve all coming together to face a once-in-a-century challenge. Starting here, with two stories that neatly bookend our clients’ rich diversity.
Chief Digital Officer Louise Smith tells us about history in the making at Lloyd’s of London—a storied insurance market that until recently conducted much of its on-premises business like it did in the 17th century. Vice President Qian Fan describes the creative tumult at Red Dragonfly—
a tiger economy retailer forced to pivot operations in a matter of days. Both were rocked by the pandemic and each, as you’ll discover, has found a unique path to new growth.
How can companies both grow and thrive despite COVID-19?
A global panel of digital transformation experts weigh in.
Lloyd’s roots run back to 1688, and a coffee house where merchants met to insure the economic engines of the day: trading ships. By 2019, Lloyd’s was a booming insurance and reinsurance marketplace with a staggeringly diverse portfolio, having insured the first cars, the first planes, and the first satellites (as well as quirkier cultural assets like the Beatles catalogue and David Beckham’s feet).
The journey to digital was less smooth. Thanks to the complexity and diversity of the systems used across the London Market, a number of attempts to modernize stalled. Ironically, one of Lloyd’s challenges was also a historic advantage: the ability to trade face-to-face. Buyers and sellers still met in Lloyd’s famous Lime Street headquarters, with more than 5,000 people moving through the bustling, cathedral-like space of the Underwriting Room on any given day.
At the center of the room is a ship’s bell salvaged from the HMS Lutine, a frigate laden with gold and silver bullion that was lost in 1799. The Lutine had been underwritten by Lloyd’s, and her bell came to represent both the integrity of the firm—Lloyd’s paid the staggering claim in full within two days—and the perils of the sea trade. For more than a century, the Lutine Bell was struck when news of an overdue ship arrived—once for the loss of a ship and twice for her return—so that brokers and underwriters heard the news simultaneously. In modern times, the bell has been used ceremonially or to mark major world events (like the 9/11 attacks).
March 19, 2020 was one of those days. On the advice of the UK government and to stem the spread of a growing pandemic, Lloyd’s rang the bell, sending everyone home to work remotely—and ending more than three centuries of tradition.
Louise Smith had been on the job just six weeks when the bell rang. “One day I was in a buzzing workplace,” she recalls, “and the next I was sitting at home wondering: what in the world is happening? I wasn’t prepared for the emotional aspect of it.”
Lloyd’s of London, Virtually
Innovation isn’t always about technology. Just as importantly, it’s about purpose, behavior, and culture. It’s about people.
Louise Smith
Chief Digital Officer at Lloyd’s of London
For all its ties to the past, Lloyd’s is an excellent example of a forward-looking organization that had started a digital transformation pre-pandemic and found themselves well positioned to accelerate their work. At the end of 2019, they’d begun to synchronize physical and digital realms so Lloyd’s could offer both seamless transactional experiences and continuous deployment. It was an ambitious plan that promised to have a big impact on customers and employees. Then the bell was rung.
Smith and her team had already identified a growth lever—serving customers new offerings—and the lockdown only provided more clarity to what needed to happen next: create an online version of the Underwriting Room. “That space is not just important to what we do, but who we are,” says Smith. “It’s the heartbeat of the company, and we knew that room’s energy needed to be restored. Innovation isn’t always about technology. Just as importantly, it’s about purpose, behavior, and culture. It’s about people.”
Smith and team needed to recreate the energy of the physical room and help a suddenly fragmented ecosystem of underwriters and brokers collaborate again.
The first version of the Virtual Room was built in just six weeks and features tools that enable people to replicate the experience of walking on to the floor. It lets people quickly find a broker or underwriter, search their profile to assess their risk appetite, book time via an integrated calendaring feature, and create digital booths that allow participants to meet. Chat functionality connects users for real-time communication, or to arrange a more formal online or (distanced) in-person meeting. “It’s not just about satisfying transactional trading,” Smith says. “It’s about the reasons the brokers loved the big physical room: connecting and collaborating.”
The Virtual Room is supported by the Connect Bar, a helpdesk function that helps new users quickly navigate the platform as easily as walking the floor itself. Feedback from early adopters was key. “We wanted to know what wasn’t working, too,” Smith said. “We wanted the Virtual Room to be as grounded to the experience of the Underwriting Room as possible.”
Two months on, and Lloyd’s had conducted 23 product development sprints, creating a more integrated platform that provides more features for voice and video communication. With remote working firmly in place, users also wanted a mobile experience that delivers the same consistency of experience as a desktop or laptop. Even the calendaring feature was improved. (Early iterations could only book in 30-minute increments, even if a broker needed to connect for just two minutes).
The results so far? Both underwriters and brokers say the Virtual Room has run smoothly. But perhaps most fascinatingly, a business that ran in the same way for almost 400 years was forever changed—something that people said could never be done. Now, many are embracing the benefits of these new ways to engage, with some in no hurry to return to the office. Smith too is thinking of the long term. “It will be interesting to see whether these platforms can facilitate more efficient remote negotiations between brokers and underwriters. Previously, we deemed these essential face-to-face discussions.”
As the world adjusts to a future of remote, flexible work powered by smart data and personalized technology, the Virtual Room could become a space just as indispensable to the insurance market as the soaring Underwriting Room. Smith is ready.
“It’s not about going back,” she says. “It’s about what’s next.”
The Red Dragonfly brand was created in 1995 and enjoyed steady growth in their first years by sticking to basics—especially know your customer. In its Chinese home market, that meant one thing: data. Customer data and analytics in China work on a scale and precision just not appreciated by most westerners, and by 2019 Red Dragonfly had fine-tuned its system—they called it “intelligentization”—so that nearly every decision at every level of the company was based on deep data insights. They had around 4,000 owned and franchised shops, with over 8,000 employees. Leaders and employees were looking forward to the Chinese Spring Festival in late January 2020, a lively time of both celebration and impulse buying.
And then.
On January 23rd, China became the first country to go into lockdown. In just days, retail sales dried up. Many businesses closed their stores for good, and the future of Red Dragonfly looked grim. Wenzhou, where their factory and headquarters are located, was second only to Wuhan in the severity of its outbreak. “Our focus was simply survival,” says Vice President Qian Fan, who still has a touch of anxiousness in his voice at the memory. “We had nearly 100 million yuan [~$15.3 million USD] in monthly expenses, but no sales. If we stayed closed, the business could have died in a month. We had to find a way to live.”
In an open letter to all employees, company founder Qian Jinbo put the matter succinctly: “No sleep lately.”
Red Dragonfly Grows (More) Wings
But like Lloyd’s, Red Dragonfly already had a head start on a path to growth through uncertainty. Deloitte Digital, together with partner Alibaba Cloud, had just completed the first phase of Red Dragonfly’s digital transformation—a variation of the customers, core and work framework dubbed ‘people, goods and market’. Key to this approach was the ability to gather hyper-detailed buying preferences from millions of customers; preferences often captured at point of purchase. Digital native customers at any Red Dragonfly store might join the retailer’s loyalty program, for instance, by scanning the DingTalk QR code of an in-store sales consultant through the Taobao mobile app. The company was also capturing biometric data—specifically, foot shape—to inform data-driven, flexible production.
Deloitte Digital worked with Fan and Red Dragonfly to map each program member’s data across online and offline channels, including hundreds of tags for precision targeting through—for example—phone numbers and delivery addresses. When consolidated with their orders, products, and sales data, this data helped the brand understand exactly who to target with which products. Precision Growth would happen through personalized offerings.
By early February, Red Dragonfly had a plan and was on the road to recovery. With Qian Fan—the company’s ‘commander-in-chief’ in the ‘combat command against the pandemic’—
directing an average of 62 meetings a day, Red Dragonfly launched an online store using WeChat mini-programs—mobile sub-applications with features like e-commerce and coupons. The company’s in-person sales force returned to work in the cloud as online shopping guides. A central command center created marketing templates for specific types of customers. So much was changing each day that rapid communication was key, so a ‘mission book’ guided each day’s activities and provided real-time sales rankings with instant rewards to incentivize employees. Within a week, the company had established over 500 member groups on WeChat, each with more than 300 customers.
It was a good start, but not nearly enough. So, in an all-hands-on-deck moment, every Red Dragonfly employee became a sales associate. “We encouraged all departments—R&D, financial, administrative, even data engineers—to join the camp of selling shoes,” Fan says. Workers who needed help honing their pitches were given access to business professors at Taobao University. With such mentoring, and the help of ecommerce tools like Tmall’s smart shopping guide, every one of Red Dragonfly’s over 5,000 shopping guides moved online.
The result? Red Dragonfly logged zero sales on February 3rd; by the end of the month, they’d reached 30 million yuan (~$4.6 million USD).
That was just the beginning. In March, they launched an entirely new sales channel: Livestreaming. Before COVID, livestreaming was limited to influencers and celebrities, but resourceful store managers started to livestream on platforms like TikTok and Taobao during the lockdown, and soon discovered a lively social experience—not to mention a welcome respite for shut-in shopaholics. Suddenly, online shopping was an event, fun and interactive. Shoppertainment!
Red Dragonfly’s first livestream, launched on March 8th, featured founder Qian Jinbo chatting nervously to the camera. “It wasn’t easy for him, but he led by example,” Qian Fan says. “He was determined to do it and became pretty good. Following his lead, many of our employees started livestreaming too.” The first live show was viewed by 435,300 people and was seen as instrumental in attracting a younger demographic to the brand.
Since the company had already invested in customer data, the newly fledged livestream shopping guides could help their customers rapidly find the right products and post purchase links for quick buys. “Off-store sales are equivalent to giving wings to the store,” Fan says, using the Precision Growth levers establishing new channels and increasing awareness. By the end of March, year-over-year sales volumes had increased by 114%; after securing a collaboration with livestream ecommerce hostess Viya—whose nightly shopping sessions regularly draw more viewers than the Game of the Thrones finale—Red Dragonfly was selling tens of thousands of units in minutes. During a global pandemic.
The changes enabled by Precision Growth brought new life to the traditional Red Dragonfly enterprise. As the Chinese economy recovers, the company will integrate even more advanced data analytics for understanding customer needs, including an AI-based recommendation engine.
“This past year has accelerated and deepened our digital and organizational transformation,” Fan says. “Looking back, we were nervous, but now I see that it was a great opportunity for us.”
In a sense, it feels like we all just took a ride in a time machine; nearly overnight, we were transported to the future. Organizations initially reeling from sudden disruptions have shown incredible adaptability to meet their customers’ and employees’ needs in a virtual-only reality. Many have proven their ability to adapt and change the way they work quicker than ever before.
If it isn’t already apparent, we’re not here to pine for a return to a normal that we may never see again; the public health threat will pass, but the business landscape will forever be changed.
As societies open back up, organizations that will be the most successful are those that make a choice: avoid the temptation to revert back to old ways, and instead inspire themselves by what they were able to accomplish. They’ll do this by evolving their Digital DNA to empower humans to work in digital ways across their ecosystem, organization, leadership, teams, and as individuals.
As we look back at the past year, three insights served us well. These insights apply regardless of any one organization’s approach to transformation—whether a focus on the levers of Precision Growth, or the organizing function of digital customer, core and work.
The first is Purpose. We must continue to understand what customers need and want, and when they want it. We must see the world through their eyes as rapidly as it’s changing, and respond in meaningful ways. The second is Agility. With so many changes overnight—a company, its functions, its teams, the world—we must prioritize what matters most and then pivot in a cross-functional way. We need integrated squads of creatives and data scientists, analysts, and product marketers. We must move fast and far. We can’t do that if we’re separated by silos.
The third is Empathy. We’ve both seen incredible displays of this everywhere and have come to see COVID as a catalyst for cultural change. Did Qian Jinbo ever think he’d personally be selling shoes via livestream? Not likely. Yet he put himself in a vulnerable place in order to lead the way. We’re all more vulnerable now, and the mutual support we get from teams is inspiring and uplifting. Empathy will bear fruit for years and years to come, but it’s especially critical now. As ever, our clients continue to inspire—each with a human story, each facing crisis their way. We hope their stories may be able to help you learn too.
Digital transformation:
A Primer
Connecting in the Digital Age
New Hub DIgital
Learning and Looking Ahead
Infographic by The TOM Agency
By Sam Roddick and Steve Hallam
Digital transformation: A Primer
Connecting in the Digital Age
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If we stayed closed, the business could have died in a month. We had to find a way to live.
QIAN FAN
Vice President Qian Fan
Condé Nast and Deloitte Digital have teamed up to present Digital Acceleration in the Time of COVID, a nine-part series of stories from global business leaders who've charted a path through uncertainty.
Here, leaders at Deloitte Digital reflect on simultaneously experiencing and advising on a crisis, while executives at Lloyd's of London and Red Dragonfly share how a human focus and rapid digital transformation helped their organizations not just survive the pandemic, but bring their futures forward faster.
SAM RODDICK
Global Head of Deloitte Digital
STEVE HALLAM
Deloitte Digital Leader, Australia
More tales of digital transformation:
If we stayed closed, the business could have died in a month. We had to find a way to live.
Qian Fan
Vice President, Red Dragonfly
Digital Acceleration in the
Time of COVID
ig things have small beginnings. Just so, back in January of last year, the first reports of a novel coronavirus barely raised eyebrows. Yet within weeks most travel had stopped, many businesses had closed, and all of us faced massive disruption.
Digital Acceleration in the Time of COVID